Interest rates are falling in the bond market as the Federal Reserve says it will hold rates at a record low. The Fed also suggests Europe's debt crisis poses risks to the U.S. economy.

The Fed's cautious statement is boosting demand for relatively safe assets like Treasurys. The yield on the 10-year Treasury note, a widely used benchmark for mortgages and other consumer loans, is down to 3.13 percent from 3.25 percent late Tuesday. The 10-year note hasn't closed at that level in more than a year.

The price of the note maturing in May 2020 is up 34.375 cents to $103.125.

Interest rates were already lower after the government said new home sales dropped 33 percent last month to a record low following the end of homebuyer tax credits.